Hardister Corp

question 46

Multiple Choice

Hardister Corp. Hardister Corp. has the following information available from its financial statements for 2012:
Refer to the Hardister Corp. information above. At the end of 2012, Hardister's common stock was listed on the stock exchange as having a market price of $65 per share and there are 10,000 shares outstanding. Hardister has no preferred stock. What would be Hardister's price earnings (P/E) ratio for 2012? (round to two decimal places)

• A) 7.69 to 1
• B) 12.31 to 1
• C) 1.30 to 1
• D) .77 to 1

Interpret the significance and application of opportunity cost, sunk cost, and product cost distortion.

Comprehend pricing strategies based on demand, competition, and cost.

Grasp the concept of manufacturing constraints and the theory of constraints strategy.

Recognize the implications of different pricing concepts on financial decision-making.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from producing and consuming a good or service.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Producer Surplus

The gap between the price producers are ready to take for offering a product or service and the actual payment they receive.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive.